GLOBALIZATION OF MANAGEMENT EDUCATION Implications, Imperatives and Strategic Bets for Education Institutions and Organizations Dr. Jaime Alonso Gómez Distinguished Professor of Strategy and International Management USD SBA & EGADE Business School 1 Agenda for today 1. Globalization of Management Education. Implications for Universities and Education organizations WHAT IS NEW? SO WHAT? 2. Conversation and Reflection on Globalization of Management education WHAT IS NEXT 2 1
SO, WHAT IS NEW? WHY IS IT IMPORTANT TO STUDY GLOBALIZATION? WHAT IS GLOBALIZATION? 1. WELL LET US SEE SOME PICTURES AND NUMBERS 3 WHY IS IT IMPORTANT TO STUDY GLOBALIZATION? Market Population Growth The potential market is huge: populations are already much bigger than in the developed world and growing much faster and in both C h i n a a n d I n d i a hundreds of millions of people will enter the middle class in the coming decades. 4 2
Emerging Multinationals WHY IS IT IMPORTANT TO STUDY GLOBALIZATION? Samsung Arcor KOF Arca Bimbo TEVA 5 Emerging Market Private Capital Inflows 2010 (Bn $) Global mergers-andacquisition dealmaking soared 23% to $2.4 trillion in 2010, is projected to reach $3 trillion this year Emerging Market Private Capital Inflows 2007 (Bn $) Emerging Market Private Capital Inflows 1995 (Bn $) 6 The Institute Dr. of Jaime International Alonso Finance GOMEZ 3
7 Corruption Perceptions Index 8 4
WHY IS IT IMPORTANT TO STUDY GLOBALIZATION? Migration World Two individuals seeking Asylum in Europe 200 million migrant workers in the world today 3/15/11 9 9 Name 2011 2010 1 CARLOS SLIM 74 53.5 Bill 2 BILL GATES 56 53.0 Bill 3 WARREN BUFFET 50 47.0 Bill 4 BERNARD ARNAULT 41 ------------ 5 LARRY ELLISON 39.5 ---------------- 261.5 209.7 Forbes Richest in the World 2010-11 7 AMANCIO ORTEGA 31 10 5
Latin America in Figures (2009) Country GDP (US$) POP (Mill) Brazil (10) 2,025 000 000 000 198.7 México (12) 1,480 000 000 000 111.2 Argentina (24) 558, 000 000 41.0 Colombia (29) 401, 000 000 43.6 Venezuela (33) 350, 000 000 26.8 Peru (45) 253, 000 000 29.5 Chile (46) 243, 000 000 16.6 Ecuador (66) 108,000 000 14.5 Bolivia (91) 45, 110,000 9.6 Uruguay (92) 44, 520 000 3.49 Panama (96) 40, 320,000 3.36 Paraguay (108) 28, 270 000 6.99 Source: FMI 11 Global Terrorism Index The Economist Colombia faces a higher risk of terrorism than any other country in 2003-04, according to an Index complied by the World Markets Research Centre, a provider of country intelligence. Along with Israel, Colombia is given an Extreme risk rating. The USA is rated fourth riskiest, while Britain ties for tenth place. According to the index, North Korea, is reckoned to be the least likely place for a terrorist attack. 12 6
Social Megatrends Day-to-day connectivity Ecological consumers Life long learning Technological Megatrends Nano Tech Intelligent materials Optical Systems Trade Globalization Global Governance Personalized Marketing New family and demographic structures Technology based health Trans generational life styles Bio Bio Info Enviro tech - Agricultural tech Medical Synthetic Cells, tissues, and organs Wireless technologies High performance computers Artificial Intelligence Energy, water, etc 13 WHY IS IT IMPORTANT TO STUDY GLOBALIZATION? The new economy Geo graphic Geo political Geo technological Geo energetical Geo demographic Geo economic Geo psychological Geo biological Increase in Globalization Complexity Inter-dependence Opportunities Challenges NEW Knowledge Skills/competences rules of competition NEW-NEW-NEW INVESTMENT PHYSICAL EFFORT LOCAL EMPLOYMENT COST MADE BY INNOVATION TALENT AND KNOWLEDGE GLOBAL/REGIONAL SUSTAINABLE WEALTH VALUE ADDED DESIGNED, CREATED BY 14 7
GLOBALIZATION PRESENTES NEW NEEDS FOR MANAGEMENT AND LEADERSHIP IN TERMS OF: 1. Increased market size and customer base across countries and regions 2. International employee transfer rates have dramatically increases, 3. Higher levels of competition, newer players, new consumers 4. Good leadership in one country will not automatically be good leadership in another country 5. Increase in opportunities for business, and social well-being (BOP) 6. Economic integration AREAS: EU, NAFTA, Cono Sur 7. Growth from non traditional (developed) nations 8. Emerging economies such as those in Asia will do well; western nations, not so. Disparities will occur within regions, as well. Japan projects a GDP of 2 %, Vietnam 6.5 %. Peru, 6 %, Mexico 5% 9. Technological connectivity across all corners of the world 10. Extended markets, cross cultural life styles, changing demographics, etc. 11. Shifts in destinations and volumes of FDI 12. Nano, Bio, Info, Enviro 13. Geo G, P, T, En, Ec, Psy, Bio 15 Globalization refers to expanding global links, interconnectedness, and complexity, implies/requires (cognitive) understanding and (behavioral) know-how of the PEST element of life on a global scale, and demands the growth of global thinking, thus creating a world society. HOW DOES GLOBALIZATION IMPACT ME AND MY FAMILY? Examples. 1. Should I send my kids abroad? 2. How many and which languages should my children learn? 3. Where is the best place to go for retirement? lowest cost of health high level of quality 4. Who is going to sustain my pension fund (aging demographics)? 16 8
END OF..WHAT IS NEW? CONCLUSION: THE STUDY OF GLOBALIZATION IS IMPORTANT RELEVANT PERTINENT NECESSARY FUNDAMENTAL. IF UNIVERSITIES, COMPANIES, ORGANIZATIONS AND DECISION MAKERS ARE THE BE PROACTIVELY EFFECTIVE WITH THE NEW WORLD DYNAMICS 17 Globalization IS a FORCE OF CHANGE FOR BUSINESS, TECHNOLOGY, SOCIETY, ECONOMICS, GOVERNMENT, POLITICS. GLOBALIZATION OF EDUCATION: Implications for Univs. IMPLICATIONS ON 1. Curriculum design and content 2. Design of learning dynamics 3. Faculty profile and configuration 4. Research activity 5. Student and graduate profile 6. Service staff profile 7. Use of technology 8. Selection of education partners 9. Vision and mission of the school 10. School branding, marketing and promotion 11. Interacting and dealing with media 12. Interacting and dealing with accreditation agencies 13. Interacting with the business world 14.. BUT, HOW DOES ONE START? 18 9
Step 1: UNIVs need to define a strategic posture LEVEL OF UNCERTAINTY SHAPE THE FUTURE ADAPT TO THE FUTURE DO NOTHING Learn from all others and be the last mover CLEAR FUTURE FEW CLEAR FUTURES WIDE RANGE OF FUTURES TRUE AMBIGUITY Portfolio of actions No regrets moves: reduce cost, improve student service, foster traditional research, emphasize Intl collaboration, Big and strategic bets: create blue oceans for management education 19 Step 2: DEFINE A VISION TBA 20 10
Step 3: STRATEGIZE 21 EDUCATION SUPPLIER Programs, Students, professors, tools, skills, teaching and research Differentiation Globalization Strategic bets on education Blue oceans in education Global Brand High INVESTMENT 2 3 Low INVESTMENT 1 4 Where do we want to be? What are the good place to go to? What is the worst place to be? 22 11
STRATEGY BASED ON MY COMPETENCIES Canada? Mexico? Close PROXIMITY Geographic Cultural Mission. Distant Look for attractive entry opportunities Ignore or Minimum Effort High priority Opportunistic Acquisitions Franchising, Licensing advising UT Austin (LATAM) Babson Low ATTRACTIVENESS In fashion/currency Capacity building Financial High 23 GLOBALIZATION OF EDUCATION: What Is the impact of Globalization on Universities? 24 12
GLOBALIZATION OF EDUCATION What Is the impact of Globalization of Education on Universities? Example: recruiting international students implies 1. Traveling internationally to meet prospects (time zones, food, budget, safety, language, etc.) 2. Evaluation of transcripts from different academic systems 3. Interpretation of recommendation letters 4. Management of diversity and expectations in the classroom 5. Enhancement of job opportunities and internships for not allowed to work but very bright students 6. Understanding funny accents 7. Acceptance of different hygiene habits 8. And the list continues. 25 GLOBALIZATION OF EDUCATION Example 2: Including globalization content in the curriculum 1. Curriculum design implies designers who understand and know about globalization (it is not enough to have a foreign passport or to go to international conferences or include international cases) 2. Presents many opportunities for global education to be more deliberate, integrated/synergetic and aligned with the current and future needs of business, government, society, technology. 3. The need to develop partnerships..who, what for, where, when, how much, how many criteria? 4. Dilemma: Globalization of management content tends to be mostly context based vs traditionally accepted research expectations that go for universality and (relatively) context free 5. Difficult but can BSs ignore, overlook, de-emphasize the importance of global management education? 26 13
END OF THE SECOND PART SO WHAT? CONCLUSION: THE GLOBALIZATION OF EDUCATION IS IMPORTANT RELEVANT PERTINENT NECESSARY FUNDAMENTAL. AND IS A GREAT OPPORTUNITY TO BE DELIBERATE, INTEGRATED/SYNERGETIC, AND ALIGNED WITH THE CURRENT AND FUTURE NEEDS OF BUSINESS, GOVERNMENT, SOCIETY, TECHNOLOGY.. 27 How to start? Cont? WHAT IS NEXT? Focus on Management Education 28 14
Strategic BETS LOW Consensus HIGH Every-day Academic Operation Efficiency, meeting objectives, budgets, etc HIGH Traditional operation Certainty Risk Management And trust building Innovation Differentiation Leadership LOW Betting 29 How does the School of Business of the future look like? Where are we going?... BUSINESS EDUCATION IN A GLOBAL CONTEXT What differentiation, value propositions Could/should BS provide? What new business-operation models can/could BS undertake? How can we innovate in Business education In global economy Beyond Flexibility in delivery (time, space, pace, learning methods) 30 15
SBA s Strategic Choices: External Analysis growth markets demographics social trends technology Strategic Choices Faculty Business model Alliances, etc Internal Analysis School Level Contributions to Individuals and Corporations? Value to society? Legacy to future generations? Program Level which programs, services, experiences? 31 Globalization of Management Education Innovative Education Exchanges, Dual Degrees Elective courses Multicultural progrs. Andragogics Internships STRATEGIC BETS Domestic Mkts BLUE OCEAN EDUCATION Global Mkts Traditional Programs Distance Learning Exec Education Program migration Franchising degrees Opening sites with country of origin brand Traditional Education 32 16
Strategy, Innovation & Action Innovative Bus. Programs M. E-commerce Entrepreneurship OneMBA Triumph Domestic Mkts Education as usual Chicago Fuqua INSEAD ITESM-EGADE INCAE Intl/Global Mkts Trad. Bus. Programs 33 Strategy, Innovation & Action Innovative Bus. Programs MBA with JD, MSc, MD? Traditional Processes Education as usual MIMLA (Tbird) TULANE (Ph.D.) ESADE in Chile & Peru Innovative. Processes Trad. Bus. Programs 34 17
Strategy, Innovation & Action In house production Innovative Bus. Programs MBA + Public Policy Specialty CEMS SUMAQ Outsourcing/ Partnering Education as usual Franchising Branding through others Trad. Bus. Programs 35 Diseño curricular acreditado y relevante Disminuir los tiempos de diseño curricular de planes de estudio Procesos esbeltos en la operación administrativa (bajo costo, estandarización, etc.) Eficiencia en la operación Innovar para bajar costos y lograr excelencia en la operación que sostiene al proceso educativo Credibilidad de las opciones Calidad en contenido Competitividad Diferenciación Valor Innovación Reputación en términos de calidad vs valor. Libre transferibilidad entre formatos de entrega y opciones internacionales. Disfrutabilidad de la experiencia educativa. Diseño conjunto con clientes Respuesta superior a clientes Diseño de experiencias de aprendizaje Capacidad para responder a expectativas y agregar valor Innovación en el concepto de educación (comp. Laborales) Planes de educación en la carrera ejecutiva 36 18
Global Management Education Some basic reflections If no clearly articulated vision + strategies ----->decay If no faculty/staff involvement/development -----> decay If no official discourse of the school ---->decay If no initial champions and budget ---->decay If no symmetric or quasi-symmetric joint decision making or clear roles and responsibilities with partner -- no alliance Accreditation of partner schools is important (but not essential) to assure quality, credit tranfers, grant money, and operation procedures 37 Example: From Ideas to Implementation Country, Regional and Global Challenges Sustainable Wealth Creation International Competitiveness (I,O) Research for technological Innovation (NVC for Wealth Creation) Democracy, community/regional development =>competitive society Quality on higher education management systems Strategic Initiatives Corporate Social Responsibility + Sustainable Development TBNVC (Incub + Accel), Family Business Inst. Base of the Pyramid efficient markets. New and more robust education methods Strategic International Alliances WE WANT TO ACCOMPLISH Wealth Creation and Employability Knowledge Economy New Companies Culturally Consonant International Competitiveness Well Rounded Citizens Robust Democracy WE WANT TO BE Socially Responsible Innovation Driven Differentiated Institution 38 19
Strategy, Innovation & Learning LOW Consensus DOES MY SCHOOL HAVE A STRATEGIC BET? DO I HAVE A STRATEGIC BET? TRADITIONAL EDUCATION HIGH HIGH Traditional Knowledge and Skills Conservative thinking and Performance, Low Cost, High Efficiency Certainty Risk Management Dilemas, Paradox, Predicting Leadership & Management?? VL LOW 39 THANKS, GRACIAS, MERCI, ARIGATO Dr. Jaime Alonso GOMEZ jagomez@itesm.mx jagomez@sandiego.edu 40 20